Extra steps needed to calculate Capital Gains Tax

Anyone making disposals of assets on or after October 30, 2024, will need to take some extra steps to calculate any Capital Gains Tax (CGT) due. The extra steps, which will affect individuals, trustees and personal representatives, have resulted from the Self-Assessment tax return not being able to automatically calculate the figures at the new rates. Exceptions to this include:

• Residential property.
• Business Asset Disposal Relief.
• Investors’ Relief.
• Carried interest.

The Chancellor increased the amount of CGT due on specific transactions in the Autumn Budget. The main rates of CGT that apply to assets apart from residential property and carried interest have risen from 10% and 20% to 18% and 24% respectively for disposals made on or after October 30, 2024, said HMRC. For trustees and personal representatives, the rate has gone from 20% to 24% for disposals made on or after the same date. But the CGT applying to Business Asset Disposal Relief and Investors’ Relief has gone up from 10% to 14% from April 6, 2025, and will rise again to 18% for disposals made after April 6, 2026. The CGT rates for applicable residential property sales will remain at 18% and 24% as before.

Some special provisions to be aware of

Where contracts have been entered into before October 30 last year but not completed until after that date, there are special provisions. The same applies for “contracts entered into on or after 30 October 2024 for the phased rate change that applies to Business Asset Disposal Relief and Investors’ Relief”, HMRC said. Additional special provisions apply for share reorganisations and exchanges, where an election is made. But the best thing to do is to consult with your accountant and find out the best way to ensure you are meeting all your relevant CGT obligations. There is an adjustment tool available to support individuals, trustees, and personal representatives when calculating the correct adjustment figure. Adjustment boxes on the following forms should be used to account for any in-year difference in tax to make sure the tax due is correct:

• SA108 — individuals capital gains summary page.
• SA905 — Trusts and Estates capital gains.
• SA970 — Tax Return for Trustees of Registered Pension Schemes.

Source: Gov.uk You can find out more about the changes to the main rates of CGT at Gov.uk.

Let us help you

If you will be affected by these changes and want to make sure you don’t make a mistake with your CGT calculation, then please get in touch and we will do everything we can to help you.